Low water levels, market shifts affect grain shipments

January 01, 2001
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by Emily Wilson

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Grain shipments through the U.S. and Canadian Great Lakes in 2000 are down significantly, and officials are blaming it, in part, on the weather.

The Lakes are now in their fourth year of declining water levels. Warmer temperatures, light snow and minimal ice cover the past three winters (1997-98 through 1999-2000) promoted more evaporation than usual. That, combined with less rain in spring, summer and fall months, has led to the lowest water levels in the Great Lakes in four decades.

"Water levels are cyclical; they go up and down," said Dennis Johnson, chief executive officer and harbor master at the Port of Thunder Bay, Canada.

Since the mid 1960s, Lake Superior has enjoyed relatively high water levels, he noted. "In my mind, there is no question that there is some relationship between the water levels and global warming," Johnson said.

Low water levels have forced many ships that transport bulk grain to lighten their loads to avoid running aground in the suddenly shallower waters. "Lighter loads mean less efficiency and, bottom line, the transport of less cargo," said Lisa Marciniak, port promotion manager for the Duluth (Minnesota) Seaway Port Authority.

Duluth expects grain shipments to be off by about 14% from last year. By Nov. 24, 2000, 3.8 million tonnes of grain were shipped through Duluth Seaway, compared with 4.4 million tonnes at the same time in 1999.

Grain is one of the port's three principal cargoes. Iron ore and coal shipments at Duluth are affected even more than grain because of their heavier weight.

Tom Miller, supervisor of the AGP Grain elevator in Duluth, said his facility is loading about 1,000 to 2,000 tonnes less per ship. "I've never seen the water levels this low before and I've been here 30-some years," he said.

Mick Cerdich, manager of the PV Connors Point grain elevator at Superior, Michigan, said his elevator also has had to cut back on its grain cargoes this year. "We are loading less grain, but we're pretty much just buying what we need," he added. "It's really affecting the vessels that have to leave here with less grain."

Draft restrictions — how deep the vessel can sit in the water without touching the river bottom — are set by the U.S. Army Corps of Engineers and ensure there is a foot of space between the bottom of the ship and the river bottom. Channels at the Sault locks/Ste. Mary's river system in Michigan, which connect Lake Superior to Lake Huron and through which virtually all vessels pass to reach the lower lakes, are dredged to 27 feet, making the normal draft restriction 26 feet.

In late December, the draft at which a ship could go through the Sault/Ste. Mary was 25 feet, 3 inches. One inch of draft equals about 120 tonnes of grain, meaning a 730-foot vessel sailing from Thunder Bay is leaving with 1,000 to 1,800 tonnes less grain.

"What we need most is a lot of snow in the Lake Superior basin," Johnson said. The day he spoke with World Grain, the area was expecting a foot of snow.

"Our real problem is not so much reduced water levels, although they are a concern and have been an irritation, but we have been suffering from other competition even more," Johnson continued. "We're really hurting by direct rail and cargo diversions to other ports, such as the West Coast, Churchill, Quebec City and even the U.S. gulf."

Grain shipments through Thunder Bay for 2000 should total a little over 7 million shipment. "But that's just idling; that's less than half of our traditional throughput," Johnson said.

In the mid-1980s, nearly 50 million tonnes of grain moved through the Great Lakes for export. Thunder Bay alone shipped 16 million tonnes. The biggest customer was the Former Soviet Union. When the Soviet system collapsed, so did the Great Lakes' grain exports.

Today, the major market for U.S. and Canadian grain has shifted to the Far East. The bulk of grain exports leaves from the West Coast, through the ports of Churchill or Quebec City on the East Coast or by rail to the U.S. Gulf. Combined with new collection and cleaning facilities being built on the Canadian Prairies, there are "lots of choices and options today for handling grain," Johnson said.